Beyond repair?BMW’s reputation in South Korea goes up in flames

DRIVING a plush BMW is an emblem of status among brand-conscious South Koreans. Lately, it has become a source of angst. After 40 of the German carmaker’s diesel models mysteriously burst into flames, car parks have turned them away, forcing desperate motorists to park illegally in the street. “BMW phobia” is trending on social media. Since it owned up to the defect in July, the company has recalled 106,000 vehicles in the country. In August the government banned several models from the roads. On August 30th the police raided BMW’s offices in Seoul, the capital.

South Korea is not the only country where BMW has had to recall the vehicles, which were built between 2011 and 2016, for having a faulty exhaust. In Europe it is replacing the defective part in more than 300,000 cars. Inexplicably, however, only cars in South Korea have caught fire. That goes some way to explaining why fury there has been fiercer, and the government response tougher, than elsewhere. But the episode also illustrates the willingness of the authorities in Seoul to impose harsh penalties on businesses it deems irresponsible.

In most places, when flaws are discovered in products, the authorities impose temporary restrictions on their sale, fine the manufacturers, and let life go on. Not in South Korea. When most countries levied penalties on Volkswagen after the German carmaker was discovered in 2015 to be cheating in emissions tests, Korea banned sales of many VW marques, including Audi, its highly profitable premium brand. The bans were lifted late last year, but sales will probably take some time to recover.

BMW’s contrition, and its assurances to owners of defective vehicles that they can count on all necessary assistance, have not doused the indignation. On August 28th Kim Hyo-joon, the head of BMW Korea, was hauled before parliament. Many Koreans suspect there may be additional problems with cars sold in the country (the firm denies this, and any other wrongdoing).

As the Audi precedent shows, a fiasco can dent a marque’s prospects for years. Politicians are already murmuring about a ban not just on driving Beemers, but on sales, too. That would be a blow to BMW, which, like other luxury carmakers, covets well-heeled Korean consumers. The fires have not injured anyone or caused any physical damage (other than to the cars themselves). But BMW’s reputation needs some new bodywork.

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